SPUNLACE: MARKET ON THE MOVE

Spunlace lines have been ramping up like crazy during the past several years. Perhaps no other factor has contributed to this fact more than the rapid growth of the consumer wipes market. Favored for its textile-like feel, durability and cost efficiency, spunlace has become a leading choice for wipes manufacturers. While airlaid has also enjoyed considerable growth in this market, industry observers are claiming that spunlace, because it�s the choice of at least one major consumer products company, has been claiming a larger share of this market.

The expansion of the spunlaced market was first witnessed in Europe beginning in the late 1990s when such companies as Orlandi, Tenotex, Sandler, Jacob Holm and Suominen all announced new line investments. The European wipes market was growing and this market was choosing spunlace nonwovens. This trend caught on in North America a little later. While several major companies and even some smaller ones had been making spunlaced nonwovens for some time, there was no major spurt of activity reported. In fact, as the European market seemed intent on meeting demands for more spunlaced, North America was intent on adding airlaid capacity with most of that market�s major players adding capacity.

This situation changed in 2002. With the airlaid market suffering from a severe overcapacity crisis and its participants such as Buckeye Technologies and Concert Industries dropping prices, the wipes market began to shift toward spunlace. While it has not been officially announced, it has been widely rumored that Procter & Gamble in that year converted its North American wipes lines to spunlaced substrates to match its European offerings, which had always been spunlaced. Expecting that P&G competitors and the private label market would eventually do the same, spunlaced manufacturers began announcing investments in North America.

�The global spunlace market has largely been driven by hygiene wipes,� said Ulrich Hornfeck, sales director of Sandler AG, a German nonwovens producer that entered the European spunlaced market two years ago. �To fulfill capacities, a lot of different wipe products for a variety of applications were successfully tested on the market.�

Personal care and household cleaning wipes are two categories where spunlaced manufacturers are noting strong growth. Photo on left courtesy of PGI; right, courtesy of Enqvist Consulting.

Therefore, now the industry is watching these new lines closely, trying to determine if all of this capacity will be followed by continued growth in the spunlaced market or if a period of overcapacity�as already witnessed in airlaid�is set to follow. The fate of this market, it seems, is largely tied to the wipes market. If it continues to grow, the spunlaced market should do fine, but if it levels off, all of this capacity could have trouble selling. And, can this period of explosive growth in the wipes market continue? Esa Palttala, executive vice president, for one, things it will, particularly in North America.

�In Europe the market is more saturated for spunlace than in the North America or Asia, but spunlace will win more markets especially in wiping sector,� he predicted.

Jump to 2005
Following a period of rapid expansion in the late 1990s and early 2000s, the European spunlaced market is currently experiencing a period of slow growth. Caused largely by the strength of the dollar, resulting in difficulties doing business with North American clients, this slowdown has skewed the region�s supply-and-demand ratio, somewhat driving down prices and increasing competition.

At least some manufacturers have dealt with this situation with plans to expand into North America. Jacob Holm, for instance, announced last year that it would build a line in Asheville, NC as part of an effort to boost its North American business, which has been reduced significantly in recent years by the dollar/Euro situation. The 4.5-meter-line will reportedly be capable of producing 15,000 tons of material per year. While the line is centered on spunlaced technology, it will produce other types of substrates required to serve markets including food service and packaging.

Jacob Holm�s CEO Peter Stoffel said that the new line, set to begin commercialization in August, is expected to help the company recoup some lost North American business, which once represented as much as 20% of Jacob Holm�s overall business. �To supply a market in a sustainable way can be very difficult if you are not physically in that market,� Mr. Stoffel explained. �You need to be close to the customers.�

Like Jacob Holm, Israel�s Spuntech Industries is hoping to improve its North American business with a new line. Just finalized last month, plans are currently underway at the company to build a new line in Roxboro, NC, an investment valued at $23.5 million. Spuntech already operates three production lines in the Upper Galilee region of Israel as well as a sales office in Connecticut.

Beyond wipes,
another key market
for spunlaced is the medical market, although share is being taken by spunbond and composite nonwovens.

Another Israeli company entering the North American spunlace market, albeit from a different strategy, is Albaad Industries. This company�s subsidiary AFG Wipes is supplementing its wet wipes converting business with its own spunlace and chemical bonding nonwoven lines. By controlling the manufacture of the fabric and the liquid, Albaad can control the quality and consistency of its final product, according to Michael Fitzgerald, vice president of sales and marketing (for more on AFG Wipes, see page 140).

While not expanding in the U.S., spunlace producer A.S. Nonwovens, also based in Israel, has recently announced plans to add a line to its operation. According to plant manager Bahir Ayata, the new line will allow the company to offer more competitive prices as well as a wider range of products.

Beyond U.S. expansion, European companies are relying on other strategies to boost their spunlace business. Suominen Nonwovens, a Finnish company that downgraded its thermal bond business to focus on spunlace nonwovens earlier this decade, purchased Dutch wipes producer Codi International in 2003 to bring itself closer to the end user. So far, the results of this move are not widely known, but in reporting its 2004 results, the company said that sales of wet wipes in Europe slowed in comparison with 2003 and competition intensified. Despite this, sales volumes of spunlaced nonwovens were reported to rise, thanks to increased orders from the U.S.

Acquisition has also been BBA Fiberweb�s strategy for dealing with the European spunlaced market. In the past 18 months, this large multinational company has purchased Tecnofibra and Tenotex, both headquartered in Italy, in an apparent move to build its position in the European wipes market. �We acquired those companies in Europe because those companies had strengths in markets that were appealing to us,� said David Ford, global vice president for marketing, business development and research and development, BBA. These acquisitions follow BBA�s installation of a large spunlace line in Bethune, SC�that plant�s second line�in 2002. This large spunlace line was the first of many U.S. investments, including the aforementioned European and Israeli invasion, that have sharply increased North America�s spunlace capacity.

The acquisitions further strengthen BBA�s European presence in growth markets such as spunlace and spunbond, added Michael Baumgartner, of BBA Fiberweb Europe. �Both Tecnofibra and Tenotex will benefit from a gain in critical mass and can take advantage of synergies in important areas within BBA Fiberweb�s current business portfolio.

�BBA Fiberweb now owns a wide range of technical capabilities. We can use combinations of viscose, polyester and polypropylene fibers, with or without pulp or microfibers; our capabilities include cross lapping, the addition of binders, lamination technologies and hydro- or thermal embossing.�

Another large player with a major spunlace expansion under its belt is Ahlstrom. This Helsinki-based company started up a large spunlaced composite line in its Windsor Locks, CT facility in early 2004. A $40 million investment, the line largely targets the wipes market on a global scale, according to Karen Castle, marketing manager for Ahlstrom�s wipes business.

�The wipes markets of North America and Europe are a huge focus for us in both the short and long term,� she said. In addition to the new line in Windsor Locks, the company acquired in late 2004 Green Bay Nonwovens, a Green Bay-based spunlaced producer. Started in 1997, GBN produces spunlaced nonwovens on one line, and Ahlstrom executives said it was an acquisition target because of its clear focus on the wipes market. While it had been rumored for some time that GBN would add a second line to its operation, Ahlstrom won�t confirm any plans of expanding the facility in the near term.

Another major North American spunlace market player is PGI Nonwovens with its Apex forming technology, an advanced spunlaced-based manufacturing process that can incorporate three-dimensional imaging directly on a fabric. While this technology was once focused largely on textile replacement applications, its focus has shifted and in April PGI earmarked 40,000 tons of the material to the wipes market.

�We believe that as more pre-saturated wipes are on the market, companies are trying to differentiate their products,� said Bob Dale, PGI�s vice president of sales, marketing and product development manager for North America Nonwovens. �Apex offers imaging that can be both functional and aesthetic, which can give consumers a reason to buy.�

A Brand New Day
As competition within the wipes market continues to increase, PGI hasn�t been the only spunlaced producer interested in offering customers a diversified product range. As consumers become savvier and more uses for wipes arise, the substrate itself is becoming more important and plain vanilla spunlaced nonwovens aren�t doing the trick.

While its plans for a U.S. line are currently on hold, Italian producer Orlandi will present two new innovations at next month�s Index exposition in Geneva. For one, the company now has the ability to hydroemboss its spunlace products to create patterned, bulky products for the wipes market, responding to consumers� demands for heartier wipes. Additionally, in response to a need for biodegradable products is Orlandi�s Naturlace three-layer composite material, which uses a mix of fluff pulp and biodegradable fibers. �The majority of our business continues to be in wipes but it is not growing today like it used to,� said commercial director Mario Saldarini. �Having specialty products helps us, even in the U.S. market where the currency rates are a concern.�

Also focusing on biodegradability is Ahlstrom, whose Hydrospun technology is dispersible and nearly 99% biodegradable. As the market for wipes continues to grow, their disposability is becoming more of an issue, not only in environmentally conscious Europe but also in North America. Flushed wipes have already been blamed for the ruination of a Michigan sewage line and the city of Raleigh has passed an ordinance allowing it to levy a fine on anyone who flushes a wipe. And, with concerns over landfill space continuing to rise, it is certainly up to the spunlace producers to make materials that are either flushable or biodegradable.

The machinery and equipment producers supplying spunlaced lines are also honing technology to keep this market viable. Rieter Perfojet has recently launched designed pattern and logo capabilities into both new and existing Jetlace 3000 machines to provide its customers with the ability to manufacture fabrics that meet pattern and logo requirements of the market. �During the last two years, it has become clear that plain wipe fabrics have become a commodity product, and customization is looked upon as a way to differentiate products within the marketplace, while at the same time providing manufacturers a way to establish brand awareness with its target clientele,� said Laurent Jallat.

Another trend noted by Mr. Jallat is the need to decrease the amount of fiber or viscose in the blend ratio. �The typical ratio of 70% viscose and 30% polyester for wipes has changed to 50% and 50%,� he said. �The basis weight is surely decreasing from 60 to 55 gpsm and soon will go to 50 gpsm or even lower. Of course, this can be done only without any change in the feel of the wipe to the user.� Rieter Perfojet is able to achieve this through its Isojet system.

Likewise, spunlace equipment supplier Fleissner has added to its AquaJet spunlace technology in recent years to meet new market requirements. Of particular importance are two-, three- and multi-layer sandwich and composite structures that feature strength, bulk, softness and absorbency. �We expect three layer composites of carded staple fibers and wood pulp to be especially suitable for the wipes market because of the advantages offered by a pulp layer in the middle and fiber layers at the outside,� said Fleissner vice president Alfred Watzl.

If met, a goal of these efforts�to create a new wipe category�could yield generous output for the spunlace market. Just recently, Procter & Gamble launched flushable kids wipes through its Pampers brand and Kimberly-Clark introduced a baby washcloth through its Huggies franchise. These successful launches are being mimicked by competitors, opening up a whole new category for wipes and subsequently more opportunities for nonwovens.

�As long as cost doesn�t outweigh the convenience of wipes, they will continue to be strong,� said Ahlstrom�s Ms. Castle.� A lot of these pressures will fall back on the nonwoven supplier to innovate.�

G-B Looks Toward Spunlaced

Traditionally a needle supplier Groz-Beckert has recently registered the HyTec jet strip for spunlaced applications. The German company will present this development next month at Index. With its HyTec jet strip, Groz-Beckert has enlarged its wide range of precision components for the textile industry to include another high-powered component. This marks an active contribution by the company to the dynamic developments taking place in the field of spunlaced nonwovens. Use of a new type of production method guarantees a totally burr-free product with form-fit, uniform jet geometries. The Groz-Beckert HyTec jet strip, which is engineered from special steel, is subject to an ongoing process of further development aimed at guaranteeing optimum results and top quality coupled with a long service life.

Will Wipes Wane?
Serious growth in wipes began in 1999 when a few household products companies introduced disinfectant cleaning wipes. Since then, new product introductions in categories ranging from floor care and window cleaning to makeup removal and sun care have helped grow the wipes market to an estimated $4.5 billion globally. While growth has slowed in more recent years and some segments, such as baby wipes, have undergone severe price pressure, industry observers are still optimistic about future growth.

�There is definitely still room for growth in the consumer wipes market,� said Ken Pearce, vice president of consumer products, Americas, BBA. �The concept of hard surface wipes and personal care products is still quite active. We still see a lot of new products hitting the retail shelves.�

While active in the consumer wipes market, DuPont Nonwovens reports much of its growth prospects in the industrial wipes business where double-digit growth was reported last year. �Our focus continues to be developing new products for our target markets segments such as the automotive refinish and print cleaning markets,� reported DuPont spokesperson Ann Wallace.

Also ensuring continued growth in the wipes market for spunlaced nonwovens, at least in North America, is the market�s continued conversion from airlaid to spunlaced nonwovens. While this began two years ago with P&G�s reported conversion to the substrate, spunlaced nonwovens have not yet completely infiltrated the North American market to the extent they have in Europe.

�The planned investments for the North American spunlace market cover the gap resulting from manufacturers shifting from airlaid to spunlaced nonwovens,� said Fleissner�s Mr. Watzl. �Beyond this, there is more room for new products to come. New products will be structured three-dimensional nonwovens and composites of staple fiber/airlaid products as two- or three-layer products because of tremendous cost savings and supplier quality compared to all fiber products.�

This new technology will hopefully protect the spunlaced market from overcapacity, a situation that plagued the airlaid market for several years following the simultaneous installation of several large-scale lines in 2001.

�The overcapacity of airlaid in 2001 corresponded to the fast growth of spunlaced nonwovens in wipes,� explained RieterPerfojet�s Mr. Jallat. �We can assume that spunlace took some wiping marketshare to airlaid and, for the time being, there is no new technology to replace spunlace, which remains the best product for this application. The demand in North America will grow. And, the demand in emergent countries, such as China, India and the Middle East, will follow the growth of their GDP as people have enough income to allocate part of it to disposable products,� he said.

Beyond Wipes The exposure wipes get as a consumer products segment, coupled with its explosive growth and massive proliferation, have made it a hot topic in the nonwovens industry in recent years. Eager to capitalize on a new consumer market, marketers have devoted a lot of resources to not only developing new wiping applications but also promoting them.

That�s not to say, of course, that these manufacturers are not focusing on other applications for spunlaced. One that is probably second only to wipes in size is the medical market, where the material is favored for its breathability and comfort. A leader in this category has long been DuPont Nonwovens with its Softesse (formerly Sontara) materials. �The medical market�s global growth is driven by demand for better infection prevention practices in healthcare settings,� said Ms. Wallace �DuPont Softess medical fabric, our workhorse spunlace product, continues to be valued and preferred by many end users with its great balance of comfort and protection.�

Despite its long presence in medical, spunlace has been facing considerable competition in recent years. Lured by increased barrier protection, many gown and drape manufacturers are opting for sturdier materials such as DuPont�s Suprel nonwovens, a mixture of polypropylene and polyester, or Ahlstrom�s composite spunbond material. However, observers are reporting a continuing preference for the comfort properties of spunlaced in Europe.

Another medical market participant Orlandi, which continues to devote an entire line�s output to the medical market, is reporting stiff competition from the Far East both on the supplier and converter sides of the business. These Asian companies are able to offer product at less expensive prices, albeit at lower quality, and are attracting more cost-conscious healthcare clients, according to Mr. Saldarini.

PGI is seeing more growth in its spunbond segment than spunlace when it comes to medical products but the company has been making strides in the filtration and acoustic markets with its Apex spunlaced nonwovens. Diversification of its business is a major growth strategy for the company.

PGI has achieved considerable success in the filtration market with its Apex products. The strength, uniformity and durability that Apex achieves through its fabric formation technology makes this material ideal for both air and liquid applications. On the air side, PGI produces Durapex baghouse filters; in liquid, it makes Aquapex pleatable media.

Also interested in new applications for spunlaced is Jacob Holm. Its North American line will feature patterning and thermoembossing capabilities that not only create diverse wipes applications but also the ability to use high-tech fibers such as PTFE and Nomex to create products for filtration and other specialty applications. In fact, specialty technical applications are so important to Suominen that last year it created a business unit dedicated to this area.

�We would not leave the wipes market but it has to be seen as only one key market,� Mr. Stoffel explained. �Resources must be applied beyond wipes into a range of markets in order to achieve volume growth and success.�

Currently technical applications comprise about 30% of Jacob Holm�s spunlaced output, with filtration growing the most quickly.

As new markets are developed, most manufacturers continue to focus significant attention on the much talked-about wipes market. Consumers will continue to demand convenience products, propelling this market forward. While growth will slow, caused largely by saturation, there is still plenty of opportunity to attract new customers, especially if manufacturers continue to be creative in untapping the needs of these customers, often before these customers even realize them.

�We can�t limit our thought process,� said BBA�s Mr. Pearce. �Technology must be constantly upgraded to be more sophisticated in a variety of ways.�